Big Debt and Big Unemployment

Krugman has a pretty pessimistic post on the OMB numbers, which he says will put debt at 70-80% of GDP by the end of the next decade. That's a huge number. Huge. We've had higher debt, but that was following a world war. The OMB also has unemployment at 9.7% in 2010 and 8% in 2011. That's also huge. These numbers call for contradictory medicines. Spending to cut unemployment, along with low interest rates to spur growth; and revenue increases to cut the debt and high interest rates to soak up the liquidity.

I'm not sure we need really high interest rates, if we're looking at 8-9% unemployment two years out, will there really be too much liquidity? Regardless, big debt means new revenue (which is actually, maybe, a good thing to deal with inequality, which Krugman discusses here).

Most of the increases in national wealth and income have been concentrated in the hands of a very small group of elites, now it's time to take it back and make stimulate our economy and pay for entitlements.